Nearly 70% of consumers received a one-time passcode (OTP) via SMS/text message to validate their identities during a new account opening in 2020† — despite years of warnings about vulnerabilities with this authentication approach. Fraudsters have become adept at intercepting OTPs via SIM swapping, unauthorized number reassignment or call forwarding. The increased use of OTPs contributed to the $13 billion lost to identity fraud during 2020.††
The risk of phone-based OTPs has led some organizations to consider alternative authentication approaches. Unfortunately, the most common alternatives often degrade customer experience, increase costs due to required manual resolutions, and undercut operating efficiency. Organizations need new and innovative authentication strategies that match the ease and accessibility of sending SMS text messages or placing phone calls.
Restore trust to phone-based one-time passcodes to focus fraud prevention resources more efficiently and reduce friction for legitimate users.